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EXPLAINER

What is actually happening with 3rd party cookies, and what does it mean for ecommerce brands?

This month, Google released a expected piece of news: "Third-party cookies restricted by default for 1% of Chrome users”. This inevitably prompted a raft of new articles about the death of cookies, which we’ve already been hearing about for a few years. But what does it mean, what’s changed, and how relevant is it to ecommerce brands?

🍪 What are 3rd party cookies and what is changing?

• Cookies are files stored on a visitors device to help your website remember info about their visit (eg items in the cart and their browsing activity)

• But not all cookies are the same - 1st party cookies are stored by your own domain, and aren’t going away, while 3rd party cookies are stored by a different domain / business.

• It’s the 3rd party cookies which are controversial, because visitors aren’t always aware who is collecting their data and for what purpose.

• For brands and publishers, the 3P cookies restriction has reduced the ability to retarget recent site visitors across the web, because many retargeting ads rely on 3P cookies to do this.

• But restricting 3rd party cookies isn’t new! Safari and Firefox have been blocking these for a number of years by default.

• However Google starting to restrict 3rd party cookies this month is relevant because Chrome is the most popular browser, with 65% market share (Source: Statcounter)

So what does this mean for my brand?

👀 Am I still able to accurately understand my consumers behaviour and optimise ad performance with the depreciation of 3rd party cookies?

Yes. Much of your analytics and core marketing tech like Google Analytics and Facebook is now using 1st party technology (ie hosted on your domain), such as Conversions API (which relies on the brand to send their first party events to Meta)

Are my retargeting ads affected by the depreciation of 3rd party cookies?

Yes and No. The traditional cookie-based approach to retargeting in ads ‘follow’ consumers across different websites, is going away. But ad platforms like Facebook have continued to evolve alternative solutions over the last few years that maintain retargeting on their social platforms (eg Conversions API)

🎯 Will it affect my attribution (ie understanding where users come from)?

No. But different marketing attribution approaches are becoming increasingly important as brands demand a more thorough understanding across the full funnel, given the impact of discovery based channels like TikTok. We’ll cover attribution in a future week.

✅ What are the recommendations for an ecommerce brand in 2024?

To maximise ROI and ensure good marketing decisions are being made in 2024:

1. Continue to prioritise building email and SMS lists to have a direct line of communication with your customers.

2. Focus on collecting accurate, first party data - ie shopper behaviour on your website. For instance, Google Analytics fuels the capabilities of Google Ads, so it is important that it is tracking accurately.

3. Consider a server-side tracking solution, which recognises returning users without cookies, improving campaign ROI. You can learn more on what this is in the recent GA4 webinar replay below.

2024 State of eCommerce Report shows under-investment in Top-of-funnel channels

Fospha, a marketing measurement platform, shared this month their State of Ecommerce report for Q1 2024, based on $650 million in ad spend.

Their takeaways?

• Paid social remains significantly under-invested. Advertisers have only fulfilled 59% of the potential in paid social, with scope to nearly double spend and still gain profitable returns.

• Google Analytics significantly under-attributes top of funnel channels like TikTok. (This is something I also covered in a recent LinkedIn post showing the value of using post-purchase surveys alongside GA4 insights)

• TikTok is the strongest channel for new customer acquisition with it increasingly becoming a popular platform for product discovery.

You can access the report below: